Mortgage Rates continue to experience minor volatility near all-time lows, bouncing moderately higher today after moving lower yesterday. The move didn't take rates any higher than Tuesday's rather abrupt short-term highs, and despite the fact that rates have moved in opposite directions every day this week, the actual rates quoted should have remained the same for most scenarios while the variations would be limited to borrowing costs.
That means that when we reference "higher rates," the Best-Execution Rate for Conventional 30yr Fixed Loans remains at 3.75%, but closing costs would be higher for that rate today vs yesterday (or the amount of lender credit would be lower, depending on your scenario).
(Read More: What is A Best-Execution Mortgage Rate? )
Markets were generally calmer today than yesterday and there's a sense that the week is winding down ahead of the Memorial Day Holiday. Bond Markets will be closed on Monday and most lenders will not issue rate sheets. In addition, tomorrow is a half day with little by way of data or events on the calendar.
(Get Caught Up With: Yesterday's Post)
Ongoing Guidance: We'd continue to advocate not trying to "get ahead" of current market movements as a high degree of uncertainty is pervasive. While it's a reasonably safe assumption that European concerns will generally help rates stay lower than they otherwise would be, that "otherwise would be" part is very much a moving target. Best bet is to focus on the fact that rates are at their all time lows, and with very close to their all-time low borrowing costs. Add in the fact that progress has always been increasingly difficult from current levels and risk vs reward for floating vs locking looks a bit larger than we'd like, but not out of the question for those who understand the risks and have an exit strategy if things don't go their way.
Loan Originator Perspective With Rates At All Time Lows
Julian Hebron Branch Manager, Loan Agent, RPM Mortgage
Yesterday and this morning, locked clients who need to move forward quickly (purchases and refis where clients have specific reasons to close near-term). But my theme continues, which is: clients who can stomach some risk should be able to capture lows at misc intervals during this summer as eurozone and U.S. fiscal circuses play out and cause uncertainty that leads investors into MBS (which brings rates down). But those who want to wait have to be ready to go on a moment's notice. That means being pre-approved now so it's only a matter of locking a rate when it's there.
Bon Van Gilder, Finance One
Rates remain near all time lows. "Hogs get fat, pigs get slaughtered". This idiom is used to express being satisfied with enough, that being greedy or too ambitious will be your ruin. This has been proven over and over when deciding to lock a rate or not.
Ted Rood, Senior Mortgage Consultant, Wintrust Mortgage
Seems pricing always suffers a little before 3 day weekends. For the most part, lenders would rather err on the side of caution than not when they're putting out Friday rate sheets that may be valid until Tuesday. While the fundamentals haven't changed and won't anytime soon, if you have the pricing you want, why not lock it in?
Matt Hodges, Loan Officer, Presidential Mortgage Group
It's an amazing run that we've been on with rates. Forget a day or two leading into Memorial Day might give back some in rate. At this point, Tuesday is the next logical lock point. I don't see any improvement overseas, so bonds that price mortgages will still be your safe haven going into June.
Alan Craft, Loan Officer at Integrity Home Loan of Central Florida
It seems like we get to this exact same level and just can’t seem to break any lower. There is still a much better chance of going higher than going lower. Therefore we are still advising all to lock at these levels.
Today's BEST-EXECUTION Rates
- 30YR FIXED - 3.75%
- FHA/VA -3.75%
- 15 YEAR FIXED - 3.125 edging down to 3.00%
- 5 YEAR ARMS - 2.625-3. 25% depending on the lender
Ongoing Lock/Float Considerations
- Rates and costs continue to operate near all time best levels
- Current levels have experienced increasing resistance in improving much from here
- Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
- But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.
- (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario. There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).